A comprehensive investigation is undertaken on the effect of laser scanning pattern on the microstructure of cylindrical samples made of Alloy 718 processed by Laser Powder Bed Fusion. It is observed that the common alternate direction scanning of the laser results in a more homogeneous microstructure than the less common concentric line scans where significant microstructural heterogeneities are seen between the edges and the center of the sample. The investigation focuses on the precipitation, crystallographic texture, grain size, grain morphology and residual stresses utilizing synchrotron X-ray diffraction, neutron diffraction and electron microscopy. The heterogeneous microstructure of the sample processed with the concentric laser pattern influences the chemical composition of the matrix, which alters the reference “strain free” interplanar spacing used for evaluating the residual strain. The investigation underlines the significance of the processing parameters on the homogeneity of the microstructure and the effect of the chemical variations on the determination of residual stresses in materials such as Alloy 718, where strong local chemical variations occur because of different types and extent of precipitation.